The move by Health Minister James Reilly will result in the abolition of the €200 discount paid to half the population, who currently hold private health cover, when the system of compulsory insurance comes into effect.

The tax relief will be replaced by some form of financial support from the Government.

But there is no guarantee that this payment will be worth the same amount as the tax relief when Universal Health Insurance (UHI) comes into effect in five years' time.

Everybody will still get some form of financial assistance from the State to help pay the cost of their health insurance under the UHI system.

On top of that, additional financial support payments will be offered to low- and middle- income people, linked to a means test and ability to pay.

But how much financial assistance will be given to everybody and the thresholds for the means-testing are not known.

At the moment, the tax relief is not means-tested and is therefore available to everybody who has health insurance, regardless of their income.

The two million people with health insurance effectively get €200 back from the Government in the form of tax relief.

The €200 discount is used by many families to offset the rising cost of health insurance and ensures they can afford it.